Roger Guesnerie: What Can Economists Know? 3/5

The video discusses modern economic theory, highlighting its role in financial crises and critiquing its optimistic view of financial markets. It examines the rationality hypothesis and expectational coordination, offering internal and external criticisms. The methodological discussion emphasizes the importance of mathematical tools and the challenges of balkanization in economics. The conclusion calls for a reevaluation of rational expectations and encourages exploration of diverse beliefs.

What are the implications of the multiplicity of equilibria in economic models?

What role do mathematical tools play in the development of economic theories?

What are the potential consequences of abandoning the rational expectation hypothesis?

How does the concept of 'expectational coordination' influence economic predictions?